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In a dusty vacant lot beneath theFremont Bridge, Scott Edwards toggles switches on a bulky controller and watches his drone rise. About two feet across and equipped with four rotors, it looks nothing like the winged combat drones that loom over various theaters of war and, thus, the darker corners of the public imagination. In fact, its sleek, white surfaces recall nothing more exotic than an iPhone.

Edwards sends his vaguely insectile device whirring over the lot, careful not to fly over the small gathering of people watching his demonstration (staged for my benefit) from the perimeter. “There’s a body language to drones,” says the 29-year-old founder of the 300-plus-member hobbyist group PDX Drones. Hovering directly over someone’s head is considered creepy, a violation of embryonic 21st-century etiquette. Steer clear of personal airspace, Edwards has found, and most humans are brightly inquisitive about the technology. Other species can be even more enthusiastic. “Dogs love ’em,” he says, as a pit bull alternately chases and flees the bobbing, weaving flying robot. “It’s like a modern-day Frisbee.”

On this summer day in 2014, Edwards’s drone is a curiosity. In 10 years, such machines will almost certainly be humdrum, each device just one of thousands of unmanned aerial vehicles (UAVs) buzzing about our airspace.

Best known in America as weapons in the War on Terror, drones are quickly moving from the military to the civilian sphere, where the technology offers applications, both potential and proven, in “the three F’s”—farming, film, firefighting—and beyond. (In Japan, crop-spraying by drone is already commonplace. DHL uses drones to deliver medical supplies to a small German island, and filmmakers used a drone to capture a motorcycle chase scene in the James Bond movie Skyfall.) The possibilities have attracted at least one top technophile: Wired editor-in-chief Chris Anderson left that magazine, one of high tech’s more excitable hype machines, in 2012 to cofound 3D Robotics, now a drone-industry leader. Major corporations are also circling, with Amazon developing a “Prime Air” service to deliver packages by UAV (in a half-hour or less!) and Google at work on its own drone-delivery program, Project Wing.

Oregon boasts a robust aviation cluster, including Boeing Portland (based in Gresham), heavy-duty-helicopter manufacturers Erickson and Columbia Helicopters, and Insitu, one of the lead players in combat drones. (Owned by Boeing, Insitu is technically in Washington, just across the Columbia from Hood River, but has many ties on the Oregon side of the border.) Meanwhile, the “Silicon Forest” seeded decades ago by the likes of Tektronix and Intel has attracted a deep pool of engineering talent. This convergence has drone boosters forecasting a “Silicon Sky” over Oregon: a vibrant new industry, pioneered by tech-scene and aviation veterans and buoyed by state R&D funding—not to mention the only federally designated test ranges on the mainland West Coast.

In this imagined future, flying robots tell farmers which crops need to be irrigated, sprayed with pesticide, or treated for disease. They reveal hot spots in building fires before firefighters charge in, or map the earth with previously unimagined detail. The infant industry’s proponents conservatively estimate that Oregon drone design, manufacturing, software, and applications could bring $486 million to the state over the next decade. “In 10 years, the aerial-robotic network will be as common to our civilization as the smartphone is today,” predicts Jonathan Evans of Portland drone start-up Skyward.

But the industry must overcome a few not-so-minor obstacles. Besides intense competition from other states and less stringently regulated countries, there’s the technology’s ominous military heritage and its attendant privacy concerns. Above all, many in the industry fear that federal bureaucratic dithering and overzealous state laws, passed in reaction to an unfamiliar and sometimes unsettling technology, will leave America flailing behind the rest of the world in this near-space race.

“Right now, the industry is just a handful of people who have believed in it, and pushed for it, and done a lot of work on their own with very few resources,” says Ryan Jenson, CEO of the Wilsonville-based drone company Honeycomb. “We can drop the ball, or we can be, by far, out in front.”

Drones, like this one from the local start-up Honeycomb, can provide detailed crop data to farmers.

A large screen in a conference room at CentralOregon’s Kah-Nee-Ta Resort shows an overhead view of the ruined Chernobyl nuclear plant, the camera looking straight down into a cooling tower. The next footage weaves among beams inside the postapocalyptic structure. These images would be difficult, if not impossible, to capture without a drone, explains the New York–based filmmaker Brian Streem.

“You can do things with drones that you’ve never seen before,” Streem later tells me. Drone filming is cheaper than shooting by helicopter, allows launch and landing in environmentally sensitive areas, and gives access to places cameras previously couldn’t go. “It gives you a different perspective on the world,” Streem adds.

Streem screens his images at the annual conference of the Pacific Northwest chapter of the Association for Unmanned Vehicle Systems International (AUVSI), the nation’s leading drone trade association. Over the course of two days, more than 200 attendees hear presentations on using drones for night reconnaissance on wildfires, collecting irrigation data from potato crops, and surveying ice shelves in theArctic. Among the crowd, a wonky bunch abounding with pilots and engineers, excitement at what the future may hold competes with an undercurrent of anxiety over what it may not. Jeff Decker, an engineer with Hood River company Cloud Cap—the firm is developing drone safety technology—explains the heady moment. “Right now, we’re seeing need meeting technology,” he says. “There aren’t many times when you get to be around for that.”

Decker’s is one of five UAV projects—from among 40 applications, all from Oregon-based companies—partially funded by SoarOregon, a state-subsidized nonprofit formed late last year. The state invested around $880,000 in SoarOregon—not a lot compared to competitors like Nevada, where one drone initiative received $3 million in state funds in October. But SoarOregon’s overseers believe they can encourage technological breakthroughs via a less expensive, more entrepreneurial approach. “Oregon will punch above its weight—which is something Oregon’s always done,” says Mark Morrisson, the organization’s executive director, citing the presence of industry-leading companies here.

If SoarOregon is one potential (but unproven) catalyst, Oregon’s new federal drone test ranges are another. Located near Pendleton, Tillamook, and Warm Springs (hence the conference’s location), these swaths of airspace are among a limited number of places, outside remote military bases, where UAVs can legally be flown for commercial purposes. Right now, drones in America occupy a tricky legal space. While it’s legal for hobbyists such as Scott Edwards to fly UAVs for fun, it is currently almost always illegal to fly a drone for any commercial purpose. That means most of the entrepreneurs gathered in Warm Springs are operating in a gray area, developing—and, in some cases, already selling—products they only hope will become legitimate. The Federal Aviation Administration has promised to make rules for commercial drones by September 2015, but has repeatedly delayed the process.

With regulators thus blocking the critical R&D step, the drone community saw the FAA’s selection of the Oregon ranges (part of a larger network also including ranges in Alaska and Hawaii) last December as an enormous boon to the industry here. Drone enthusiasts hope the ranges will attract companies—Amazon, for instance—that want to test commercial UAV technology. “This would be a great place for them to validate the engineering behind what they want to achieve,” says Brian Whiteside, manager of the Warm Springs test range and CEO of the Corvallis drone outfit VDOS Global.

The gap between that hope and current reality, though, is ironically apparent during the conference. Nothing gets off the ground, as a pair of planned test flights are scrubbed at the last minute due to safety issues. In fact, while Oregon’s ranges were supposed to be operational by July 1, only one, Pendleton, has actually hosted a flight.

“There’s a window to capitalize on these test ranges,” warns Morrisson. “If we miss the opportunity, then quite simply, if you’ve got to test stuff, you’re going to go where you can test it.”

Despite frustrations, Oregon drone projects are moving forward. Ryan Jenson’s company, Honeycomb, which markets UAV systems for agriculture, projects revenue of $500,000 in its first year of sales. “We’ve been getting the early adopters,” says the 28-year-old CEO at his Wilsonville office-park headquarters, adding that “2015 is the year of massive expansion.” So-called precision agriculture is forecast to make up approximately 80 percent of the commercial drone market.

An engineer by training and a serial entrepreneur, Jenson founded Honeycomb with two friends in 2012, after a conversation with a farmer about advanced pesticide sprayers. “I said, ‘I could just build a robot to do what you’re talking about,’” he remembers. “It was a crazy idea at the time. No one would fund us. No one knew what would happen with the technology.”

By next year, Jenson’s 15-employee operation is on track to produce 300 batlike, 4.5-foot-wide aircraft that utilize a camera, multispectral and thermal sensors, and, of course, a bird’s-eye view to detect, for instance, early signs of crop distress invisible to the naked eye. Clients pay a $21,000 annual subscription fee for the aircraft and a software package that helps them interpret data the drones gather. Jenson’s initial success comes despite one major technicality: customers are buying his product even though it’s currently illegal to use in the United States. So far, the FAA hasn’t enforced its rules in the agriculture sector, and the agency will almost certainly approve drone use in rural areas whenever it gets around to issuing its long-awaited rules. Meanwhile, Jenson has his eye on venture capital, which proved elusive when he started his company two years ago but is now starting to flow into this emerging industry.

This summer, Portland-based Skyward, a 12-person firm that makes unsexy yet vital software for drone operators, received a $1.5 million infusion from Voyager Capital, a venture firm with a portfolio that also contains local high-tech start-ups Elemental and Chirpify. Skyward’s CEO, Jonathan Evans, has the self-assurance of a helicopter pilot—nine years in the army, including a six-month stint in Kosovo—combined with the zeal of a technophile. The 36-year-old, a self-described “huge geek,” dropped out of the University of Oregon’s MBA program to start Skyward after being inspired by one of Anderson’s Wiredstories on drones. (On the way out, he recruited his finance professor to serve on the company’s board.)

The soon-to-be-ubiquitous “aerial robotic network” will need rules as well developed as those governing high-altitude air traffic, Evans says. That’s where Skyward comes in: the company’s software, which Evans calls “TurboTax for drones,” will allow operators to document pilot training and maintenance, log flights, and view maps of urban areas that show where cities prefer UAVs to fly. “We’re ecosystem enablers,” he says. “We’re tying together the manufacturers, the cities that want this infrastructure moving through their airspace safely, and the regulators and insurers to capture the information everybody needs to operate safely.”

For Evans, Skyward’s recent venture-capital victory means more than money. It represents validation of his drone dreams. “It’s like I was the freshman and the coach was like, ‘Let’s bring him up; he’s got talent,’” he says. “We’re now nested in some of the most sophisticated investor networks Portland can access.”

In September, the FAA granted six film companies exemptions to its commercial-UAV ban, signaling a significant relaxation of its unmanned-aircraft policy. As the red tape loosens, this incipient industry will confront a larger issue: drones’ image problem.

First, there’s the name, which evokes, at best, bees, and, at worst, killer robots. Though some in the drone community (in particular, combat-drone companies) prefer the less loaded (bloodless, even?) “UAV,” others seek to reclaim the D word. “I want to tap into something people recognize and change their perception, rather than try and convince them there’s this new thing called a UAV they’ve never heard of,” explains Scott Edwards of PDX Drones. “If I called it ‘PDX UAVs,’ I would have 10 members.”

Then there’s the matter of drones’ battlefield track record. (“The military has been a very difficult brand ambassador for the technology,” as Evans puts it.) Drone supporters point out that many technologies, from nuclear power to the Internet, were developed for military purposes before being put to civilian use. “Most people don’t have any concept of civilian applications of the technology,” says VDOS Global’s Whiteside, whose company uses drones for environmental monitoring in the Arctic. “When you tell somebody what you’re actually doing, a lightbulb seems to go off in their head.”

Privacy concerns pose another stumbling block. Last year, Oregon’s legislature passed a bill requiring police to obtain a warrant before using drones to track a suspect. “Unmanned aircraft carrying cameras raise the prospect of a significant new avenue for the surveillance of American life,” argues Becky Straus, legislative director for the ACLU of Oregon, which lobbied for the legislation. “Technology is outpacing our laws, and we in Oregon were lucky to be able to come up with commonsense policies to address that in regard to drones.”

Drone defenders counter that the collection and storage of data should be legislated, not the mechanism that does so. Bring up privacy with a dronehead, and you’ll invariably hear that smartphones gather far more data than a UAV ever could. Meanwhile, at least 15 states have passed legislation perceived, by the technology’s fans, as “anti-drone,” and the nascent industry actively monitors and lobbies against such efforts. “Any new technology places new tension on the social contract,” Evans says. “That conversation is starting right now with this technology, and we absolutely need to articulate the right answers.”

Perhaps the most visceral discomfort around drones involves, simply, where they fly. Except for novelty remote-controlled aircraft, nothing man-made has ever plied the airspace directly above our heads. The sight of a hovering drone—just 100 yards or so above, highly mobile, and apparently autonomous—feels not only unfamiliar, but like an invasion of a space you didn’t even know you had. A close encounter with a drone evokes the feeling that technology is, finally and inexorably, closing in from all sides.

Or, depending on your perspective, opening a new, vertical frontier. Evans notes that UAVs’ ability to fly at low altitudes allows humans to see and learn about the world from a new vantage point: “You can query the surface of the Earth in exquisite detail that we’ve never seen before,” he says.

The implications of this are far-reaching and, to a large extent, still unknown. Just as Internet pioneers didn’t foresee Wikileaks, Bitcoin, or Tinder, neither could the founders of Tektronix have predicted that an oscilloscope workshop at Southeast Foster and 59th Avenue would plant the seeds for a new tech ecosystem that would sprout Intel’s multibillion-dollar research and production facilities in Hillsboro. Located at the auspicious intersection of high tech, aviation, and an energized start-up scene, our local drone sector could be as unpredictably transformative. But will the Silicon Sky really soar over Oregon?

“As much as we believe that the market will grow, there is no guarantee,” Whiteside says. “I saw that as an opportunity to be part of a new industry and a new technology, and I wanted to be one of those pioneers.”